S'pore loan to Indonesia an 'exception'

S'pore loan to Indonesia an 'exception'

SINGAPORE (Reuters): Singapore's offer of a US$5 billion loan to Indonesia to help the country on the road to economic reform was an exception, state television yesterday quoted Singapore Deputy Prime Minister Tony Tan as saying.

Singapore would have to think very hard before giving a loan of such magnitude to some other Asian country should it run into trouble and ask for help, Tan told reporters at the end of a visit to South Africa.

Singapore said early this month that it was ready to extend US$5 billion to Indonesia to supplement resources organized by the International Monetary Fund (IMF) to assist the country's economic recovery.

Tan was quoted as saying Singapore was giving the loan to Indonesia because it was a friendly neighbor and a member of the Association of Southeast Asian Nations (ASEAN).

He said Singapore would in turn benefit once confidence was restored in the Indonesian economy.

Tan noted the concern of Singaporeans over the size of the loan and said the government had structured it to minimize risk.

"It's a support facility which will only be used by Indonesia after the funds provided by the IMF, World Bank and ADB (Asian Development Bank) have been utilized," he said.

The IMF has said it would provide $10 billion over three years to back an economic reform package for Indonesia. The World Bank is to provide $4.5 billion and the ADB another $3.5 billion.

Tan said he would address the issue more fully in parliament next week, state TV reported.